For one thing, Dodd would require too-big-to-fail institutions to issue long-term hybrid debt securities that would be available during an economic crisis. In this way, big banks could provide themselves with “life support” capital and avert a collapse that would hamper the financial system, Dodd said.

Frank would require large banks with $10 billion in assets to pay fees in advance into a special insurance fund that would cover the cost of safely dismantling an insolvent too-big-to-fail bank.

Meanwhile, Dodd’s bill would have taxpayers first pay to cover costs of unwinding a large financial institution so that the failure would not negatively affect the markets; those funds would later be recouped from large banks.

The goal is to make funds available so that creditors, debt holders and counterparties don’t collapse as well.

[…]

Dodd’s also proposing a consolidated bank regulator combining all federal bank overseers, including the Federal Deposit Insurance Corp. This, he contends, would eliminate “charter shopping” — the process by which banks seek the regulator with the lowest standards to register with and pay fees to. In a related issue, Dodd also argues that bank regulators lower their standards to attract institutions and the fees their registration generate.

Banks will hate it, and if you thought the health insurance lobby had money, just wait until Wall Street gets in the mix. And unlike on health care, it’s unclear that Obama (and more specifically, Obama’s financial team) actually wants to see this kind of reform take place.